Britain’s newly-elected Labour government has declared the country “broke and broken” ahead of a crucial assessment of the public finances on Monday.

This evaluation will highlight a £20 billion ($26 billion) shortfall, which Labour attributes to the mismanagement by their Conservative predecessors.

Following their landslide victory on July 4, Labour has spent the initial three weeks in power informing the public of the severe challenges facing almost every area of public policy.

Finance Minister Rachel Reeves will present the findings of a fiscal review in a statement to Parliament, accusing the Conservative Party, which governed for the previous 14 years, of making unfunded spending promises to win public favor.

“The assessment will show that Britain is broke and broken – revealing the mess that populist politics has made of the economy and public services,” stated Prime Minister Keir Starmer’s office. “It will show that the previous government made significant funding commitments for this financial year without knowing where the money would come from.”

The Conservatives have dismissed Labour’s claims of a financial ‘black hole’ as a fabricated excuse for tax increases that Labour did not disclose during the election campaign. Some economists are also skeptical, suggesting Labour should have anticipated most of these issues before taking office.

Reeves will also announce the date for her first budget, commission the independent forecasts to be published alongside that budget, and outline the formal spending review process to allocate funds to each department. Additionally, she is expected to approve above-inflation pay raises for teachers and health workers.

Labour’s strategy to address the identified shortfall remains unclear. Reeves is constrained by election promises not to raise income tax, National Insurance, value-added tax, and corporation tax rates. Media reports speculate that Reeves may use Monday’s statement to pave the way for other tax increases in the subsequent budget. The Financial Times indicated she might delay some road and hospital building projects.

While the government statement did not detail specific measures, senior Labour minister Pat McFadden emphasized, “We will not shy away from being honest with the public about the reality of what we have inherited.” Photo by Rwendland, Wikimedia commons.